Is there any point?

Abu94

House for sale for 160 000, literally someone bid to 210 000 in 2 days and I can guarantee that it is still increasing. Absolutely pathetic that someone is willing to bid such amounts for a ****ty 2 bedroom house that needs a complete renovation. I don't even see the point in trying anymore, literally some smooth operator will come and offer insane amounts over the asking price almost immediately. Are any houses even sold anymore at the asking price? When looking for a house I can immediately add an absolute minimum of 25% over the asking price. If nobody made such stupid offers then the prices would go down.

B.A._Baracus

It's a joke alright.
My friend was trying to buy a house last year in Dublin. Same thing happened as you. Bidding went up much more than original asking price. He just passed in the end as the price was not worth the house.

I am no expert in the matters of what causes recession. But didn't the banks giving out loans and people over-paying for houses attribute to it?

Yet here we are again...

GhostyMcGhost

B.A._Baracus wrote: »

It's a joke alright.
My friend was trying to buy a house last year in Dublin. Same thing happened as you. Bidding went up much more than original asking price. He just passed in the end as the price was not worth the house.

I am no expert in the matters of what causes recession. But didn't the banks giving out loans and people over-paying for houses attribute to it?

Yet here we are again...

Surely people throwing wild bids at a house will be picked up at the valuation stage. If it's not worth that amount then mortgage shouldn't be granted

Anyway, doesn't stop cash buyers

Abu94

B.A._Baracus wrote: »

It's a joke alright.
My friend was trying to buy a house last year in Dublin. Same thing happened as you. Bidding went up much more than original asking price. He just passed in the end as the price was not worth the house.

I am no expert in the matters of what causes recession. But didn't the banks giving out loans and people over-paying for houses attribute to it?

Yet here we are again...

Yep exactly the same scenario, I cannot bid anymore as the house is no way worth the price but yet the bids keep coming in. The house literally has all its windows and doors boarded up, thought ok there is no way anyone will bid above asking and here we are it bid all the way to the moon for a 100 year old house which literally needs a complete renovation. It's super annoying as it's a third house already that it has happened to so I can add minimum of 25% to the asking no matter the house or condition as there is someone always willing to pay way more than the house is worth. Just why?

NIMAN

Maybe the bidder is a cash buyer?

Its a hard thing to say that a house isn't worth X amount of money. If someone can afford it, and is prepared to pay a certain price, then its worth it to them.

To go at least €50k above the asking price shows they either really wanted this property, or that money is no option. Perhaps as you say they have got a mortgage and are spending foolishly, but that is where personal responsibility has to come into it. During the boom we had reckless lending and reckless borrowing. People have to accept responsibility for bad financial decisions too, something that was lacking during our last bust.

If the buyer of this house gets into financial difficulty because they spend a lot more than they could afford, then I just hope we don't hear another "its all the banks fault".

Also, is there not some sort of valuation needed to get a mortgage? In other words, the banks valuation of the property, if its €160k, then they won't let someone buy it for €250k, as they stand to take a big loss if the person defaults.

NIMAN

Abu94 wrote: »

Yep exactly the same scenario, I cannot bid anymore as the house is no way worth the price but yet the bids keep coming in. The house literally has all its windows and doors boarded up, thought ok there is no way anyone will bid above asking and here we are it bid all the way to the moon for a 100 year old house which literally needs a complete renovation. It's super annoying as it's a third house already that it has happened to so I can add minimum of 25% to the asking no matter the house or condition as there is someone always willing to pay way more than the house is worth. Just why?

Is it even worth €160K?

Abu94

NIMAN wrote: »

Is it even worth €160K?

I would have assumed that it's worth around that 150 to 160 but apparently not.

NIMAN

Its worth what someone is prepared to pay for it, I suppose.

Bigus

NIMAN wrote: »

Its worth what someone is prepared to pay for it, I suppose.

Or what's the site worth with planning and how much would it cost to build what's there with fees and contributions ? 200k l would build féckall in Dublin.
Just because stuff was sold below cost in recession , doesn't make today's prices illogical .

Abu94

Bigus wrote: »

Or what's the site worth with planning and how much would it cost to build what's there with fees and contributions ? 200k l would build féckall in Dublin.
Just because stuff was sold below cost in recession , doesn't make today's prices illogical .

Well the asking price was 160 so if the owner expected to get more why did he put the price at 160 instead of 200. It's the bidders that inflated the price and probably surprised the owner himself. The houses I looked at were not in Dublin.

Peregrinus

The fact that the house sold for 50,000 more than the asking price tells me that there were (at least) two people willing to pay substantially over the asking price. Which means (a) this is a freak occurrence, or (b) the asking price was based on a serious underestimate of market demand and, therefore, of market value.

hawkwind23

Bigus wrote: »

Or what's the site worth with planning and how much would it cost to build what's there with fees and contributions ? 200k l would build féckall in Dublin.
Just because stuff was sold below cost in recession , doesn't make today's prices illogical .

I understand what your saying here , fair enough.
However the stark reality is what sort of society we are shaping?
What is illogical is that we now live and work in a state where most mid range earners cannot afford to buy a home and that is being exploited by landlords who then charge rents that they cant afford either.
Im no expert but that is very illogical and unsustainable.

We should not as a nation simply accept that its just the way it is by accident

davo10

Why do people get hung up on asking price? It's just a guide figure based on imprecise unmeasurable parameters.

The owner and EA may hope that there will be a lot of interest in the property and that the property will sell for the maximum price achievable, but no one can know this for certain.

As already posted, the true price of the property is the maximum price a buyer is willing to pay for it and as supply is low, that price is rising all the time. It is naive to expect an owner to sell at the advertised price if there are multiple buyers will to pay much more.

You might see a run down shack, another person sees the house of their dreams in the area they want to live. An investor sees a house that can be done up and resold at a profit.

Peregrinus

hawkwind23 wrote: »

I understand what your saying here , fair enough.
However the stark reality is what sort of society we are shaping?
What is illogical is that we now live and work in a state where most mid range earners cannot afford to buy a home and that is being exploited by landlords who then charge rents that they cant afford either.
Im no expert but that is very illogical and unsustainable.

We should not as a nation simply accept that its just the way it is by accident

Oh, I agree. Our housing market is currently quite dysfunctional.

That's the easy part. The difficult part is to understand how it came to be so dysfunctional, and to decide what to do about it. A lot of people have entered into arrangements, made commitments, accepted obligations, etc on the basis of how the market currently works, and if that changes radically they may suffer badly. And I'm not just talking about the banks.

Abu94

davo10 wrote: »

Why do people get hung up on asking price? It's just a guide figure based on imprecise unmeasurable parameters.

The owner and EA may hope that there will be a lot of interest in the property and that the property will sell for the maximum price achievable, but no one can know this for certain.

As already posted, the true price of the property is the maximum price a buyer is willing to pay for it and as supply is low, that price is rising all the time. It is naive to expect an owner to sell at the advertised price if there are multiple buyers will to pay much more.

You might see a run down shack, another person sees the house of their dreams in the area they want to live.

So they are their own enemies by bidding sky high. They are responsible for property price increases.

Abu94

Peregrinus wrote: »

Oh, I agree. Our housing market is currently quite dysfunctional.

That's the easy part. The difficult part is to understand how it came to be so dysfunctional, and to decide what to do about it. A lot of people have entered into arrangements, made commitments, accepted obligations, etc on the basis of how the market currently works, and if that changes radically they may suffer badly. And I'm not just talking about the banks.

Doing nothing is always better

evolving_doors

NIMAN wrote: »

Is it even worth €160K?

It all depends on rental yield.

davo10

Peregrinus wrote: »

Oh, I agree. Our housing market is currently quite dysfunctional.

That's the easy part. The difficult part is to understand how it came to be so dysfunctional, and to decide what to do about it. A lot of people have entered into arrangements, made commitments, accepted obligations, etc on the basis of how the market currently works, and if that changes radically they may suffer badly. And I'm not just talking about the banks.

Dysfunctional? There is s supply issue due to a recession when developers didn't have money to build and banks wouldn't lend it. For 10 years we castigated builders and bankers for ruining our economy with cheap money and over supply, now we castigate them for not lending and not building.

The housing market is functioning exactly as every other market in history has, when supply is plentiful, prices drop, when supply is restricted, prices rise. Add in increased wages, rising confidence, difficulty renting and you have a market sector on steroids. But that is not dysfunctional.

Effects

NIMAN wrote: »

Is it even worth €160K?

If it's in South Hill, Limerick then no. If it's in Clontarf, Dublin then yes.

SteM

Peregrinus wrote: »

Oh, I agree. Our housing market is currently quite dysfunctional.

That's the easy part. The difficult part is to understand how it came to be so dysfunctional, and to decide what to do about it. A lot of people have entered into arrangements, made commitments, accepted obligations, etc on the basis of how the market currently works, and if that changes radically they may suffer badly. And I'm not just talking about the banks.

It's not difficult at all to I understand why it's dysfunctional. The fact is that irish people have an ingrained need to own their own property. Rent is 'dead money' we're told by all and sundry. This means we want to own our property. Things are completely different on mainland Europe. A lot of people there happily rent the same property for years on end.

davo10

Abu94 wrote: »

So they are their own enemies by bidding sky high. They are responsible for property price increases.

But this is like an other commodity which is traded, if two buyers want it, the higher bidder gets it.

You were willing to pay 160, if the property was advertised at 140 and another bidder lodged a 140 bid, would you have bid 160 to get it?

davo10

SteM wrote: »

It's not difficult at all to I understand why it's dysfunctional. The fact is that irish people have an ingrained need to own their own property. Rent is 'dead money' we're told by all and sundry. This means we want to own our property. Things are completely different on mainland Europe. A lot of people there happily rent the same property for years on end.

In many cases a mortgage is actually cheaper than rent. Also, due to the difficulty with finding rental properties, owning a house is appealing.

Abu94

davo10 wrote: »

Why do people get hung up on asking price? It's just a guide figure based on imprecise unmeasurable parameters.

The owner and EA may hope that there will be a lot of interest in the property and that the property will sell for the maximum price achievable, but no one can know this for certain.

As already posted, the true price of the property is the maximum price a buyer is willing to pay for it and as supply is low, that price is rising all the time. It is naive to expect an owner to sell at the advertised price if there are multiple buyers will to pay much more.

You might see a run down shack, another person sees the house of their dreams in the area they want to live. An investor sees a house that can be done up and resold at a profit.

2 bigger houses that are renovated cost 180 in the area. This specific house is smaller and as I have said it needs a full renovation. There is absolutely no way that you could make a profit after renovation.

Abu94

davo10 wrote: »

But this is like an other commodity which is traded, if two buyers want it, the higher bidder gets it.

You were willing to pay 160, if the property was advertised at 140 and another bidder lodged a 140 bid, would you have bid 160 to get it?

Yes but it went way over that, it increased by 50k which makes no sense and it is no longer affordable. If it was I would buy the bigger house in the same street for the same price that is renovated. They were willing to pay way over the top = property prices are high and will be high as there will be always someone willing to pay.

davo10

Abu94 wrote: »

2 bigger houses that are renovated cost 180 in the area. This specific house is smaller and as I have said it needs a full renovation. There is absolutely no way that you could make a profit after renovation.

Yes but prices have risen even in the last 6 months, some buyers like to renovate houses to the standard they want them and at this particular time you may have two buyers who really want to live in this area. You don't know the bidders nor their motives for bidding, but if that is the value the market now puts on that house, that is now what it is worth.

davo10

Abu94 wrote: »

Yes but it went way over that, it increased by 50k which makes no sense and it is no longer affordable. If it was I would buy the bigger house in the same street for the same price that is renovated.

It's no longer affordable to you, it is affordable to the other bidder. I'm sorry, but the value of a house is not what you are willing to pay for it, it is what the highest bidder is willing to pay for it. That is economics at its purest.

Abu94

davo10 wrote: »

Yes but prices have risen even in the last 6 months, some buyers like to renovate houses to the standard they want them and at this particular time you may have two buyers who really want to live in this area. You don't know the bidders nor their motives for bidding, but if that is the value the market now puts on that house, that is now what it is worth.

What maket? You mean idiots who want to overpay?

Abu94

davo10 wrote: »

It's no longer affordable to you, it is affordable to the other bidder. I'm sorry, but the value of a house is not what you are willing to pay for it, it is what the highest bidder is willing to pay for it. That is economics at its purest.

If I was a billionaire and bid 500k for every house in the area without question then that means that these houses are worth that? Outbidding everyone else. Yeah no ****ing **** I can't afford it being single.

Peregrinus

davo10 wrote: »

Dysfunctional? There is s supply issue due to a recession when developers didn't have money to build and banks wouldn't lend it. For 10 years we castigated builders and bankers for ruining our economy with cheap money and over supply, now we castigate them for not lending and not building.

The housing market is functioning exactly as every other market in history has, when supply is plentiful, prices drop, when supply is restricted, prices rise. Add in increased wages, rising confidence, difficulty renting and you have a market sector on steroids. But that is not dysfunctional.

A bubble followed by a slump is pretty much the epitome of market dysfunction, surely? A well-functioning market brings supply and demand into equilibrium; it doesn't oscillate wildly like this.

Peregrinus

Abu94 wrote: »

If I was a billionaire and bid 500k for every house in the area without question then that means that these houses are worth that? Outbidding everyone else. Yeah no ****ing **** I can't afford it being single.

But a billionaire won't bid 500k for every house in the area; what billionaire wants to build up a portfolio consisting of all the available houses in a particular area? And, even if he does, why would he decide to pay 500k for each of them? All he has to do is offer more than the underbidder in each case.

That's why I say that there was at least two people willing to pay 210k, or close to, for this house. If there were not, it would not have been bid up that high. And if that's an absurdly high price for a house of that size, type, etc in that locality, well, such a high price is not likely to be achieved in the next sale, since one of those two people is now out of the market, having bought the house of his dreams, and won't be bidding next time. So this could be just an aberration.

If it happens again and again, yeah, 160k was an undervaluation of this house in the current market.

SteM

davo10 wrote: »

In many cases a mortgage is actually cheaper than rent. Also, due to the difficulty with finding rental properties, owning a house is appealing.

Why is owning more appealing than buying in the current climate? It's as difficult to find a house to purchase for many people as it is to find a house to rent, but people are still drawn to buying because it's what the Irish do.

Wanderer78

Peregrinus wrote:

A bubble followed by a slump is pretty much the epitome of market dysfunction, surely? A well-functioning market brings supply and demand into equilibrium; it doesn't oscillate wildly like this.

I suspect a well-functioning market would involve ditching the 'efficient market hypothesis' and all its equilibriumnesses! Time for us to move on from it

davo10

SteM wrote: »

Why is owning more appealing than buying in the current climate? It's as difficult to find a house to purchase for many people as it is to find a house to rent, but people are still drawn to buying because it's what the Irish do.

Many reasons, in a rental you can be evicted even if you pay your rent, that doesn't happen in a property you own if you pay your mortgage. You can sell your house for profit if market conditions are favourable, and at the end of the mortgage you own your property outright.

Mooooo

Abu94 wrote: »

Well the asking price was 160 so if the owner expected to get more why did he put the price at 160 instead of 200. It's the bidders that inflated the price and probably surprised the owner himself. The houses I looked at were not in Dublin.

They may well have intentionally put in a lower asking price in order to attract more bidders and leave the bidders push it up then

big syke

Could be the council bidding on it. Happening a lot lately.

Peregrinus

davo10 wrote: »

In many cases a mortgage is actually cheaper than rent.

That in itself is an indication that the market is not functioning well. Logically, it should cost more[/i[ to buy an enduring asset outright than to rent it for a temporary period. If it costs less, some market distortion is ramping up one price, or supressing the other (or both).

Browney7

SteM wrote: »

Why is owning more appealing than buying in the current climate? It's as difficult to find a house to purchase for many people as it is to find a house to rent, but people are still drawn to buying because it's what the Irish do.

Realistically, any responsible person who wants to plan and start a family is on a hiding to nothing in the current market if they don't buy before children come. Landlords can sell, take back for own use etc which whilst understandable leaves renters in a precarious position if they lay roots in an area and have to up sticks.

The whole rental shortage is fuelling property price rises because renters look at the 1900 they are being asked for in rent and see the mortgage that would service over a thirty year term which is exactly what current homeowners, government and voters want.

Wanderer78

SteM wrote:

Why is owning more appealing than buying in the current climate? It's as difficult to find a house to purchase for many people as it is to find a house to rent, but people are still drawn to buying because it's what the Irish do.

Did I hear Ronan Lyons say, Ireland has actually one of the lowest home ownership levels in Europe?

davo10

Peregrinus wrote: »

A bubble followed by a slump is pretty much the epitome of market dysfunction, surely? A well-functioning market brings supply and demand into equilibrium; it doesn't oscillate wildly like this.

No it isn't, at times in all markets demand outstrips supply and vice versa. That is why prices of commodities fluctuate.

A bubble can happen for many reasons, in 2008 it was because there was massive oversupply and an abundance of cheap credit. That is unsustainable. Now we have low supply, no where near enough in production and credit is not easy to get. 50% of houses are bought for cash where no credit of any type is required, and mortgages are being offered with stricker rules and stress tests so the market would now seem to be equailibriating after a slump.

Mooooo

Wanderer78 wrote: »

Did I hear Ronan Lyons say, Ireland has actually one of the lowest home ownership levels in Europe?

Nobody can tell you what you heard your either did or didnt

Wanderer78

Mooooo wrote:

Nobody can tell you what you heard your either did or didnt

I hear dead people to, cheer up, its happy Friday

Peregrinus

Wanderer78 wrote: »

Did I hear Ronan Lyons say, Ireland has actually one of the lowest home ownership levels in Europe?

Either you were mistaken, or he was. Within the EU, Germany, Austria, Denmark, the UK, France and the Netherlands all have lower home ownership rates than we do.

We are nevertheless in the bottom half. A majority of EU member states have higher home ownership rates than we do. But this is partly an artifact of the expansion of the EU into Eastern Europe, where the former Eastern Bloc states all have very high rates of home ownership resulting from the transfer during the 1990s of a huge stock of state- or publicly-owned housing to its occupiers.

heroics

SteM wrote: »

Why is owning more appealing than buying in the current climate? It's as difficult to find a house to purchase for many people as it is to find a house to rent, but people are still drawn to buying because it's what the Irish do.

Part of the reason is that when myself and my wife retire we will own the house and owe nothing every month (mortgage/rent) as opposed to renting and trying to pay the same rent out of our pensions.

Our pensions should be enough to comfortably live on but if we had to pay the equivalent of what I saw recently 1900€ pm for a 2 bed apartment the pension would be gone fairly quickly.

We will also own an asset that can be hopefully passed on to our kids.

jamesthepeach

What you have now is a lot of people who earn good morning EU and can afford good rent on a nice place.
They are trying to rent nice places, but due to the legislation landlords can't accept their higher offer of the market rate and landlords cannot discriminate based on earnings and ability to pay a steady rent effectively.
Therefore the people with the money are losing out on places to rent for ridiculous reasons when they should be able to rent them easily on their salary.

So they then go and workout what a similar rent in mortgage payment would get them and will bid up the properties to the value they are happy with. Some will even go higher than what they would have paid in rent, increasing the value even more, along with the benefits pointed out by the poster above. Lots of these people are in competition with each other so the highest bidder gets the house. none mucking about bidding below the highest bidder earning power is on a hiding.

Also estate agents know this and always price a house at way less than the price they will get just to get many people to come and look at the house. A lot of them will walk away. A lot will fall.in love with the house and the changed they are thinking of making to it to I crease that value. They will then decide what it's worth to them and bid up to that.

There is no conspiracy.

Many people are waiting g for the next property crash, which probably isn't too far away, and hoping to catch a break then. That may be your only choice if you are not prepared to match and beat bids.

davo10

Wanderer78 wrote: »

Did I hear Ronan Lyons say, Ireland has actually one of the lowest home ownership levels in Europe?

You sure did. He said that home ownership has declined dramatically over the last 10 years and is now one of the lowest in Europe. The 2016 CSO census showed ownership in Ireland at the lowest since 1971.

PokeHerKing

SteM wrote:

Why is owning more appealing than buying in the current climate? It's as difficult to find a house to purchase for many people as it is to find a house to rent, but people are still drawn to buying because it's what the Irish do.

Like asking why would you buy a car when you could just rent one? The reasons are many and pretty obvious in my mind.

I also hate this whole "oh the Irish psyche of wanting to own their own home"

There's nothing inherently Irish about it. It's not because of the plantations or the famine or any other psycho babble people pontificate about.

It's because it makes a lot of sense for a lot of reasons and people the world over do it not just the Irish.

Hector Savage

I pray for another crash.
It's back to the days when sheds in back gardens were being sold for half a million , insanity ..

jamesthepeach

PokeHerKing wrote: »

Like asking why would you buy a car when you could just rent one? The reasons are many and pretty obvious in my mind.

I also hate this whole "oh the Irish psyche of wanting to own their own home"

There's nothing inherently Irish about it. It's not because of the plantations or the famine or any other psycho babble people pontificate about.

It's because it makes a lot of sense for a lot of reasons and people the world over do it not just the Irish.

That was just a mantra trotted out by people so they could say that some how they were geniuses who saw the crash and to look down their noses at people who bought. And also by people whom wouldn't actuay get a mortgage so it made them feel better.

Most of them who I know personally who trotted out that list as the reasons they didn't buy bought as soon as they could afford too
Those who didn't buy were expecting lower prices and then got caught out by the speed of the price catch-up and are now crying that they can't buy now, but for all sorts of other reasons. It's always someone else's fault when you make a bad decision and pure genius when you make a good one.

jamesthepeach

Hector Savage wrote: »

I pray for another crash.
It's back to the days when sheds in back gardens were being sold for half a million , insanity ..

We need another huge crash alright. Might give people some perspective.

Wanderer78

Hector Savage wrote:

I pray for another crash. It's back to the days when sheds in back gardens were being sold for half a million , insanity ..

I don't to be honest, it hurts a lot badly, particularly those that are perceived to have done the right things in life, including those that purchased their own home, but sadly I do believe it's inevitable. We're stuck on a merry go round unfortunately

Peregrinus

All other things being equal, people will obviously prefer to own a home rather than rent one.

But all other things are rarely equal. If buying a home costs more than renting one - which, logically, it should - your preference for owning a home may not be great enough to lead to you pay the additional cost involved. You can phrase that as "I can't afford to buy" and see yourself as someone excluded from home ownership, or you can phrase that as "the extra cost is not worth it to me" and see yourself as someone who is making a choice about the allocation of limited resources.

Your preference, and your choice, is not just driven by cost, but by a host of other factors. For instance, the Irish rental market consists almost entirely of furnished properties which, internationally, is unusual. So a choice to rent is a choice not to buy furniture but to live with furniture that someone else has chosen, and so to give up a fair degree of control over your living environment. This contribute to renting being seen as a low-status alternative, and this will add to the stress of someone who finds they are excluded from the buying market by lack of funds/lack of credit.

And there are also social and cultural factors. Italy, for example, has a higher rate of owner-occupation than Ireland, but this is partly because young adults tend to live at home until they marry or buy a house, and because they live with their (homeowning) parents they are counted as living in owner-occupied premises, even though they don't own them. So Italy's high rate of owner-occupation is in fact associated with a lower degree of domestic and financial independence for young single adults, which is not what you might initially think.